Another important factor to note is how the land is being used. In section A only 1 out of 18 buildings is commercial, 2 being a church and a mosque and the rest being residential. However as we approach the CBD the number of commercial buildings increase. 15 out of 23 buildings are commercial. The 2 residential buildings were both fairly wealthy and modern. In Central, the average age of the building is 10 years and the average height of the building is 25 floors and all of them are affluent looking commercial buildings with either a restaurant or a shop on the ground floor. On the ground floor of 2 commercial buildings are 2 large banks, one of them being a world-wide organization (HSBC). Before the CBD there were old but newly renovated residential buildings with small coffee shops, real estate agents, hair salons and old businesses i.e. printing companies, antique shops and decoration companies, but as the Shelley Street escalator moves further down to Central, affluent, glitzy commercial and residential buildings appear.
The reason for this is mainly because of land value. As we move closer to the Central Business District, the land value goes up. Nonetheless there has been a decrease in prices since the recession. E.g. a three bedroom apartment in a more well-off development would cost HK$4-5 million as opposed to HK$6-7 million before 1998. However there are better deals in the older buildings further up Shelley Street. For example a two bedroom 800 sq. foot property in an older, pre-war building further away from the CBD would cost approximately HK$2.5 million.
Buildings only a few kilometers away from the CBD have such a large difference, property as far away as Kowloon and New Territories are even worse. Of course the value isn’t only dependent on the distance from the CBD but also how old the building is. If it is as old as 10 years, the price will not go higher than HK$2 million. E.g. Academic Terrace, Mid-Levels. The big change is primarily due to the recession and the result- a fluctuating land drop/rise.
Property furthest away from the CBD such as New Territories is the cheapest, almost regardless of the age of the building. All the property in New Territories is worth less than HK$2 million (and has less than 80 sq. feet) with the exception of a few buildings in Yuen Long and Sha Tin. Even in Kowloon, which is maximum half an hour away from Central by public transport is barely worth more than HK$2 million.
The Central Business District is mainly commercial with almost no residential buildings, mainly because it is impossible to afford. Therefore from Mosque Street to Hollywood Road are the older, more run-down buildings (pre-war) whilst from Lyndhurst Street down to Central are the richer, modern commercial buildings (post-war). This is because the CBD is where all the transport leads back to. It is also where all the major banks, offices and communication centers are, thereby being the heart of the city. For this reason, land is particularly expensive and valuable. Therefore the reason for the sudden change is because it is not only impractical to live in the CBD because of the noise but also expensive. This is why there are many residential buildings around Central so that it is convenient for work and transport but once we reach Central, commercial buildings rapidly appear.
